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Confusion and a Lack of Budget Transparency
by Silence Dogood

With the departure of Steve Ludwig as Vice President of Administrative Affairs in June 2012, there have been five SCSU Chief Financial Officers in nearly 17 months (Interim Len Sippel; Doug Vinzant, Interim Rick Duffet and Tammy McGee who took over on November 18, 2013). This is hardly a recipe for effective financial planning and coordination.

A rumor has circulated on campus that somehow the money for the severance packages for faculty and staff who retired last spring is not included in the budget. If the rumor is true, about $1,200,000 in unplanned expense will have to come out of this year’s budget and the needed budget cuts increase by more than 40% and that’s something you probably can’t find in the petty cash. With no financial information available for an independent verification of the status of revenue and expenditure experience for the current fiscal and no contemporary information regarding SCSU’s FY 2014 budget, it is impossible to determine the true financial health of the university.

On September 5, 2013, at Meet and Confer, the President presented a document showing that the budget for FY14 included a decrease of $3,140,326 due to a 5% decline in enrollment. The administration admitted that in April they were planning on a 4% decline in enrollment but adjusted their projection to a 5% decline. A portion of the budget document showing the Tuition/Enrollment Adjustment for the 5% decline in enrollment is shown in the following Figure.

In an email to the faculty on September 19, 2013, Provost Malhotra stated: “When we completed our budget planning for FY14 in April, we planned for an FYE reduction of approximately 4.0%. We are taking the necessary steps to adjust our current FY14 budget for the additional 1.0% enrollment shift, which equals about $620,000. With a total operating budget of more than $210 million, this represents a reduction of about 0.3%.”

So what Provost Malhotra’s email illustrates is that really there shouldn’t have had to be a budget reduction of $2,861,117, since in April the plan included consideration of a 4% reduction, there would only be a need to cut the FY14 budget by an additional $620,000. Unfortunately, even as of October 30, 2013, no specifics regarding reductions to the FY14 budget had been made. With no contemporary comprehensive budget and financial information available it is hard to know what has happen to SCSU’s FY 2014 budget and financial status since April of 2013.

So what is to be believed about SCSU’s current financial status? The most recent information, the SCTimes article and a document (shown at the end of this paragraph) detailing the major units where the cuts will be made that was presented at the Budget Advisory Committee Meeting on October 30, 2013 return to the $2.8 to $2.9 million figure.

With nearly five months of the fiscal year past, no details of the specific cuts to be made, conflicting information regarding the size of the needed budget cuts, no known timeline for implementation of any reductions, the required opportunity for consultation apparently not planned for and no contemporary comprehensive financial information available it is clear that there is a great deal of confusion regarding budgetary issues. Even the size of the SCSU budget given in Provost Malhotra’s email as “more than 210 million” and a recent SCTimes article, which states: “The university has a budget of about $150 million gives rise to confusion. Is St. Cloud State’s budget $150 million or $210 million? That’s a $60 million dollar question.

Hopefully, Tammy McGee can provide some needed stability to the Office of Finance and Administration and perhaps the webpage for the her office can be updated to reflect the new leadership because, at least as of Sunday evening (November 24, 2013), nearly a week after her arrival, the website still lists Rick Duffet as the Vice President for Finance and Administration.

With serious financial challenges facing SCSU, the two biggest of which are the $1,000,000 annual operating loss for Coborn’s Plaza Apartments and the significant decline in tuition revenue resulting from a 22% drop in enrollment since the peak in FY10 [FY11 -0.80%; FY12 -6.93%; FY13 -6.35%; FY14 -5% (administration estimate); and FY15 -5% (administration estimate)], amounting to approximately a $14,000,000 loss from on the enrollment peak (FY09), Vice President for Finance and Administration Tammy McGee will certainly have her hands full. One can only hope that there really is a budget and that VP McGee will be as transparent with budget information as her predecessor Doug Vinzant. Otherwise, SCSU may be doomed to a fate similar to City College of San Francisco where a trustee was appointed with czar-like powers to right SFCC’s financial ship using draconian measures (One Man’s Mission to Save City College of San Francisco Special Trustee Is Charged With Rescuing One of U.S.’s Largest Community College Wall Street Journal, November 11, 2013).

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